Team spirit: How company culture can make or break a business

by Shannon Clarke
iSelect Content Manager

There’s a common saying, based on the ideas of Peter Drucker, that “corporate culture eats strategy for breakfast”. Drucker, a management consultant, educator and author, was famous for his innovative approach to business management.

Here we investigate why a company’s culture is so important to its success, and explore what companies can do to build a stronger team culture.

Why is company culture so important?

Company culture defines and describes the environment of a workplace. It includes the values, ethics, practices and goals shared by an organisation.

It’s so much more than the mission statement – it’s ‘the way things are done’, and it can make a significant difference to employee satisfaction and performance.

As customer and employee loyalty expert Rob Markey said in a post for the Harvard Business Review, “Loyal, passionate employees bring a company as much benefit as loyal, passionate customers. They stay longer, work harder, work more creatively, and find ways to go the extra mile.”

In other words, happier employees can often be more productive. How much more? Up to 12%, according to one study by the University of Warwick.

Likewise, company culture is important for companies who want to attract – and retain –talent. Thanks to LinkedIn, Facebook and other social media platforms, it’s now easy for jobseekers to scrutinise a work environment before they even step foot in the building.

It stands to reason that when an employee feels part of an organisation, they’re more likely to stick around. And that means less time and money spent looking for, interviewing and training new people.

Lisa Golding, one of iSelect’s senior HR business partners, knows firsthand the impact a good working environment can have on office morale. At the iSelect corporate headquarters in Cheltenham, Victoria, there’s table tennis, an on-site cafe and even a slide that ends in a ball pit.

“We certainly have fun while we’re at work,” Lisa says. “I think because we are in that growth phase – we love trying new things and are fast paced. To me, it’s so important that people enjoy coming into work every day because we spend so much of our time here.

“Good company culture benefits the business too, as it drives employee engagement, resulting in a high-performing organisation.”

Learning from the best

Facebook and Google are two well-known examples of organisations that go to great lengths to create a happy work environment for their employees.

Google’s efforts “to create the happiest, most productive workplace in the world” have resulted in a number of employee perks, including free food, flexible working hours, Lego play stations, scavenger hunts and dog-friendly offices.

It might be unconventional, but the search engine giant is clearly doing something right. In 2017, Google took out first place in Fortune’s list of the 100 best places to work for the eighth time in 11 years.

Facebook is also reimagining the workplace, fostering an environment of innovation and creativity. At their New York office, employees can take time out to play virtual reality games or board games, refuel at the pizza station and indulge in homemade frozen yoghurt. There’s even an in-house pastry chef.

What makes people happy?

There’s a little more to engaging and motivating employees than happy hours, free food and video games.

While these perks are nice, some of the other factors that can strongly contribute to an employee’s happiness include:

Challenging and meaningful work: It’s important that people are regularly challenged with new tasks and variety of work, and that they feel what they do has meaning.

Living close to work: People who live far away from their workplace tend to be less happy than those who have shorter commutes.

Autonomy: Allowing people to take ownership of what they’re doing may lead to greater job satisfaction. In fact, autonomy may be a better predictor of happiness than income.

Positive feedback: Employees who receive recognition for their efforts report higher levels of job satisfaction than those who don’t.

Strong social bonds: A pleasant working environment and positive relationships with co-workers can boost office morale and employee engagement.

Building a strong culture from the top down

Ultimately, a strong, enduring and inclusive work culture starts at the top.

A company’s leadership team is responsible for making people feel valued, and for driving employee engagement, satisfaction and performance.

“It’s really important that the organisation and its leaders walk the talk,” Lisa says. “You’ve got to have a top-down approach. It’s about demonstrating that you mean what you say and can put words into action.

“As much as I like to say iSelect has a ‘flat structure’ – in that everyone knows everyone else, and everyone is approachable – we still have senior leaders. It’s up to them to lead by example by displaying company values and ensuring they’re adhered to. And I think that’s something our leaders do really well.

“Our entire executive team, including Scott Wilson, the CEO, is extremely approachable, honest, open and good at keeping people engaged.”

With social networking sites increasing transparency, it’s more important than ever for companies to invest in building a strong culture. Not only can this help to attract talented employees who share their core values, it can also boost satisfaction within the organisation and reduce turnover.

And since happy workers are better for business, it really is a win-win.